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About polluting eco-industries: optimal provision of abatement goods and Pigouvian fees


  • publications
  • 2017
  • publié Environmental Economics
  • Vol. 8 , n° 3
  • p. 46-61
  • 16 p.
  • Référence : A2017.21
  • Auteur(s) : SANS [D] , SCHWARTZ [S] , STAHN [HS]
    Abstract / Résumé : In this article, the authors introduce a polluting eco-industry. Depending on the level of damage, there are two optimal equilibria. If the damage is low, one generalizes the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, very specific results are obtained if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. The authors finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy.
    Keywords / Mots Clés : Pigouvian tax